For decades, a federal law called the Packers and Stockyards Act protected America’s farmers and ranchers from abusive monopoly power in the livestock industry. The courts began to water down this law in the 1980’s, giving a handful of corporations unprecedented control over meat and poultry production. As a result, farmers and ranchers are the victims of price-fixing, collusion, and predatory contracts. Cattle, poultry and hog farmers and ranchers are going out of business while corporations like JBS, Smithfield, and Tyson Foods extract record profits from producers and consumers alike. Farmers and ranchers are forced to sell off land and livestock, sometimes to distant investors, and life in the countryside, where small town businesses and rural schools once thrived due to the agricultural economy, is growing bleaker by the day.
The U.S. Department of Agriculture (USDA) has proposed changes to the Packers and Stockyards Act, but unfortunately those do not go far enough – and could even be detrimental – toward leveling the playing field and giving farmers and ranchers a fair chance. We are asking for your help, as a supporter of transparent, fair, and truly competitive agricultural and food markets, to tell the USDA to strengthen its proposed rule.
Dear Mr. Offutt:
I am a ____ [farmer, rancher, concerned citizen].
[Customize your comment with your story: If you are a producer, what is the name and location of your farm? What do you grow? How long have you been in operation? Why is fair competition important to you? If you are not a farmer, why is a fair and competitive agriculture market important to you?]
The proposed changes to the Packers and Stockyards Act must include stronger protections for farmers. Farmers need the following:
- A strong statement on competitive harm that removes unreasonable burdens of proof from farmers.
- Protection to file complaints and identify wrongdoing without the threat of retaliation.
- The right to form and join farmer associations without suffering retaliation.
- Fair payment that is not the result of price fixing or collusion but rather based on clear, transparent, predictable standards.
- A detailed, specific rule outlining undue preference that covers all forms of livestock, is suitable for the future of the industry, is enforceable, and has real consequences for companies that commit offenses.
I also strongly urge you to strike the criteria that will permit abusive and exploitative practices that are “customary” in this industry. Just because a practice is customary in an industry does not mean it is acceptable.
America’s farmers, ranchers, rural communities, and consumers deserve better.
On January 13, 2020 the USDA’s Agricultural Marketing Service (AMS) released its proposed rule outlining changes to the Packers and Stockyards Act (PSA). This proposed rule differs significantly from a previous version released in 2016 by the now-defunct Grain Inspection, Packers and Stockyards Administration (GIPSA). In 2017, USDA threw out the 2016 proposed rule and dismantled the GIPSA office, delegating rule-making authority over the PSA to AMS.
We supported the 2016 version of the rule, which was the result of a thorough and thoughtful 10-year process during which over 60,000 public comments were taken into consideration. Unfortunately, the latest proposed draft fails to offer real protections for real farmers and ranchers who are suffering from the very real abuses perpetrated by very powerful corporations.
We are asking for your help, as a supporter of transparent, fair, and truly competitive agricultural and food markets, to submit comments on the 2020 draft PSA rule. While you may submit comments dealing with any aspect you feel is important, we are including some talking points below, which we have identified as the most important issues relative to this version of the proposed rule:
- The PSA must include language that reinforces the USDA’s long-standing interpretation of “competitive harm,” which is that “not all violations of the P&S Act require a showing of harm or likely harm to competition.”
- If farmers must prove that an action would cause competitive harm to the entire industry, then virtually no claim by any farmer will ever have legal standing. It will simply be too high of a hurdle to clear.
- Making farmers prove competitive harm would actually place farmers in a disadvantaged position if they choose to speak out or file a complaint. Farmers would also be vulnerable to retaliatory actions by packers, contractors, and dealers.
- AMS should strike the proposed language in subsection 201.211(d), that a practice will be deemed legal unless it “cannot be justified as a reasonable business decision that would be customary in the industry.”
- There is a long list of “customary practices” in the industry that are unfair, unacceptable, and harmful to competition. These practices should be outlawed, not enshrined in the rules.
- This language is too ambiguous and allows for subjective interpretation, which is unacceptable in rules meant to protect producers and enforce antitrust laws.
- AMS should return the language from the 2016 version outlining specific violations to subsection 202(a) of the PSA, most importantly the language describing “retaliatory action” by packers, contractors and dealers.
- The fear of retaliatory action, coupled with the burden of proving competitive harm, makes it virtually impossible for producers to file complaints and speak out about the abuses of bad actors in the industry.
- The specific practices outlined in the 2016 version of the rules addressed customary practices in the industry that need to be stopped, not allowed to continue as “business as usual.”
Comments are due by March 13, 2020. Please take action, submit your comments, and spread the word to others who can help us on our mission to fight to keep our agriculture and food markets honest, fair, and for the people.